The ‘Real America Index’: A Better Benchmark

by Alyssa Oursler | July 3, 2012 11:35 am

The ‘Real America Index’: A Better Benchmark

[1]Last year, InvestorPlace debuted the Real America Index[2] — an index of stocks that are red, white and blue through and through. This year, we’re bringing it back — with a few tweaks here and there.

While the Dow Jones Industrial Average originally was created to measure truly American companies that were influential in truly American industries, the list has very much drifted away from that goal.

Sure, current Dow stocks are headquartered in the U.S., but some have a majority of sales from international operations and others even employ more workers overseas than here at home.

And our list, on the other hand … well … the name says it all. It takes 51 stocks from 50 states and the District of Columbia to create a more accurate look at the U.S. economy and stock market.

Here’s a closer look at how we crafted our uniquely American index:

We picked one company from each of the 50 states and the District of Columbia.

Each company must have local impact — including factors like sizeable statewide employment, local philanthropy efforts and plain ol’ hometown pride.

The 50 component stocks of the Real America Index must collectively tell the tale of the broader U.S. economy.

The index is price-weighted, calculated simply by adding up constituent stock prices. While costly stocks like Apple (NASDAQ:AAPL[3]) carry more weight this way, it allows even the smallest companies on the list to have significant impact.

Ideally, our selections each represent the uniquely American spirit of entrepreneurship and innovation.

Much can change in a year, though, so we’ve refined our list to make sure it’s up-to-date and still provides an exclusively American perspective into the U.S. economy and the businesses in your local community.

Check out the complete list of Real America Index components[4], complete with an interactive map of short-term and long-term returns.